BENNATO, A., BOKHARI, F. and MARIUZZO, F., 2016. Growth and returns to new products and pack varieties: the case of UK pharmaceuticals. (Centre for Competition Policy working paper ; 16-1.) Norwich: UEA Centre for Competition Policy.
Centre for Competition Policy working paper;16-1
We use quarterly sales data from the UK pharmaceuticals market between
2003 and 2013 and estimate the impact of new introductions, i.e., new products
and pack varieties within an anatomical therapy class on business unit growth.
Using a dynamic lag adjustment growth model that accounts for endogeneity of
new introductions, we find that a new product contributes to 18 per cent growth
of the business unit while a new pack variety leads to 7 per cent growth for the
business unit in the long run. Further, we find that there is significant variation
in growth by size of firm and that the marginal effect of additional products on
growth is larger for smaller business units. However, the marginal effect of pack
varieties does not differ by firm size.
The authors wish to acknowledge the contribution of the ESRC who supported their
research through Centre for Competition Policy funding (ref: RES-578-28-0002).